FAQ
What does DSCR stand for?
DSCR stands for Debt Service Coverage Ratio, which measures whether rental income can cover the loan payment.
Do DSCR loans require tax returns?
No. DSCR loans are qualified primarily on property cash flow.
What DSCR ratio is required?
Typically around 1.00 or higher depending on the program.
Can DSCR be used for short-term rentals?
Yes, subject to guidelines.
Are DSCR loans owner-occupied?
No, they are for investment properties only.
What is a fix and flip loan?
Short-term financing to purchase and renovate property for resale.
Loan term length?
Usually 12–24 months.
Are rehab funds included?
Yes, released through draws.
What is ARV?
After Repair Value.
Can I refinance later?
Yes, commonly into DSCR loans.
What is invoice factoring?
Selling invoices for immediate cash.
Is it a loan?
No.
Does credit matter?
Customer credit matters most.
Industries?
Trucking, staffing, oil & gas, medical.
Funding speed?
Often within days.
What is an SBA loan?
Government-backed business loan.
7a vs 504?
7a flexible, 504 for real estate/equipment.
Approval time?
Longer than conventional loans.
Down payment required?
Yes.
Good for startups?
Better for established businesses.
What is it?
Lump sum repaid over time.
Term length?
1–5 years.
Uses?
Expansion, consolidation.
Better than short-term?
More predictable payments.
Collateral needed?
Depends on profile.
What is it?
Revolving credit.
Interest on unused?
No.
Uses?
Working capital.
Loan vs LOC?
LOC offers flexibility.
Reusable?
Yes.
What is it?
Equipment-secured financing.
Eligible equipment?
Vehicles, machinery, medical.
Down payment?
Sometimes.
Fixed payments?
Usually.
Lease vs finance?
Depends on ownership goals.
What is a second lien?
Loan behind first mortgage.
What is a HELOC?
Revolving equity line.
Keep first mortgage?
Yes.
Uses?
Business, bridge capital.
Exit strategy required?
Yes.